Submission to Ontario Power Authority on its "Supply Mix Advice and Recommendations"
by J.A.L. Robertson, M.A., F.R.S.C.
1 Kelvin Crescent
P.O. 2047 Deep River, ON
K0J 1P0
2006 January
The Ontario Power Authority's (OPA) Report provides a thorough review of Ontario's potential for demand and supply of electricity to 2025. It paints a dark picture for the province's future unless decision makers implement its recommendations expeditiously. The special value of this study is that it examines the advantages and limitations of all options at the same time, and not just the virtues and vices of each in isolation as is so often done. Furthermore, it quantifies the potential contribution of each. According to the eminent scientist Lord Kelvin:
"When you can measure what you are talking about and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind."
If that is the good news, the bad news is that the recommendations do not form a logical, cost-effective outcome from the analysis. Rather, they represent unquestioning obedience to the Ontario Government's political decisions to "Maximize conservation and demand management", to "Pursue as aggressive an approach for renewables as is possible" and to "Replace the current coal-fired generation". The OPA found that "Consumers and businesses place a significant emphasis on the impact of supply choices on electricity prices and the provincial economy generally". However, the Report is silent on the cost penalties of these forced choices. The OPA is selling a green dream machine without revealing the sticker price that buyers would have to pay.
The media have presented the proposal as very expensive at $80 billion by 2025, with nuclear getting the largest share at $30 - 40 billion for 15,000MW installed capacity. By comparison, renewables would provide 15,500MW for much less, $14 - 22 billion. The public needs to be fully aware that nearly half the renewables consists of existing hydroelectricity that is uncontroversial. Wind, water, biomass and hydro imports account for the rest and these produce electricity about 50% more expensive than nuclear (Figure 1.2.9). People should be told that they will be required to pay a 50% premium for the satisfaction of using renewables. Over recent years there has been public outrage at smaller increases.
The OPA's report of a dramatic slowing in electricity demand since 1990 seems to be good news. However, until the reason is understood, the demand forecast is unreliable (see under "Demand" later) and underestimating the electricity needed would be very bad news for the province and its people.
What benefits are supposed to derive from the 50% premium for renewables? According to Fig.1.2.11 the "Environmental Loading" for nuclear is the same as for biomass and about 25% greater than for wind and hydro imports. However, examination of the SENES Report on which this is based shows that the three factors that most penalize nuclear are Radioactivity, Water and Sustainability. So let us examine these one by one.
Any releases of radioactivity are controlled to be within regulatory limits that are considered to constitute negligible risk. The additional dose to people as a result is a small fraction of what they receive otherwise and well within the natural variation of radioactivity across the country. SENES calculated its score from UNSCEAR's collective dose "acapted (sic) for present purposes" (SENES p.7-18). This concept, that integrates all individual doses worldwide and out to 10,000 years, facilitates calculations but has little real meaning. The fact that individuals of hundreds of generations in the future may receive additional radiation that is a minute fraction of what they voluntarily accept as a result of their lifestyles, e.g., where they choose to live, should not determine the energy policy for current Ontarians. SENES fails to mention the de minimis principle whereby minute doses should be excluded when calculating collective doses for policy purposes. It also ignores the current controversy over whether such minute doses are actually beneficial due to a biological process termed hormesis.
Nuclear uses large amounts of water for cooling but it does not consume it. According to the Report, SENES based its analysis on studies of the European Commission where rivers and lakes have exceeded their limits for thermal loads (SENES p.7-28). In Ontario, with its lower population density and colder climate the thermal discharge from nuclear plants is not harmful, and can even be beneficial. At the Bruce nuclear site "waste" heat has been used to heat greenhouses while fish-farming and other applications are possible. For this reason nuclear should receive a negative score for "Environmental Loading". Even on the local level, environmental impact reviews show the discharges cause negligible harm to the aquatic environment.
SENES bases its estimate of nuclear "Sustainability" on estimates of uranium reserves (SENES p.7-45). However, it ignores the fact that higher prices for uranium, as for other minerals, will result in additional reserves, yet so little uranium is consumed an increase in uranium price would not greatly increase the electricity cost. Uranium is widely distributed in many geological formations and even in seawater. Before writing off current nuclear as unsustainable SENES should calculate whether exploiting uranium from seawater, e.g., in a dual-purpose nuclear desalination plant, would make it prohibitively expensive compared to renewables at the margin. More important in this respect, SENES is confusing chalk and cheese. Wind, biomass and hydro are treated as concepts from which current designs will evolve but nuclear is treated as a specific design of the current CANDU and its immediate development, CANDU-ACR, already designed. A strong advantage of nuclear (fission) is that it is not limited by the availability of uranium as fuel even for the current design of reactors. As uranium prices increase, fuel can be recycled in current reactors to extract more of its potential energy: at present only about 1% is exploited. Beyond that, fuel "breeder" cycles can be introduced. Here CANDU has a tremendous advantage in that by switching to a feed of thorium - a mineral at least as abundant as uranium - it can extend its life by hundreds, if not thousands, of years. On this timescale sustainability is academic since nobody can forecast what energy systems will be employed in the year 3000, say.
A relatively minor point, but one symptomatic of the failure to consider Canadian conditions, is the penalty assessed to nuclear for GreenHouse Gases (GHG). According to SENES Table 7.30 much of the GHG emission is due to "Operation and Maintenance" but this is for BWR's using enriched uranium. The enrichment process is an extremely electricity-intensive one and, in the U.S., most of the electricity is produced in coal-fired stations. Thus this penalty is inappropriate for CANDUs fuelled by natural uranium: even if in the future CANDU reactors are fuelled by Slightly Enriched Uranium the penalty assessed would be grossly excessive. This criticism becomes significant when one considers that GHG emissions are given a weighting factor of 20, twice that for conventional pollutants that are killing people every day.
The result of this re-examination shows that the environmental impacts of nuclear and most renewables are so low compared with other activities that are accepted every day that comparisons between them are meaningless. Small differences can be altered by the impacts chosen and the weights given them.
Consumers told the OPA that their highest priorities were for "availability, reliability of supply and rate stability". Essential to these is a reliable forecast of demand. Over nearly three decades there was a remarkably strong correlation between electricity consumption and gross domestic product (GDP), not only for Ontario but also for many other jurisdictions with electricity grids. Consumption was growing about 25 per cent faster than GDP. According to the Report something dramatic occurred to electricity consumption in Ontario in 1990. The consumption per capita, after rising steadily and nearly tripling between 1960 and 1990, abruptly decreased (Fig.1.2.2). The electricity intensity demonstrated a similar abrupt change at 1990 (Fig.1.2.3). The only explanation offered is "A decrease in intensity over time cannot necessarily all be attributed to gains in efficiency, and may be due to structural changes in the economy" (Part 2.6, p.160) - in other words "I don't know why".
Unemployment, the most effective means of conserving electricity, was decreasing so that was not responsible. Possible explanations, not discussed in the Report, are that electricity lost any cost advantage to natural gas (NG) in 1990, resulting in a massive swing to NG and that the higher electricity rates drove heavy industry and manufacturing out of the province. However neither of these seems sufficient to cause such a large change and they do not explain the abrupt nature of the change. Until the correlation is understood the OPA demand forecast must be considered unreliable. For instance, continuing escalation of NG rates could result in an abrupt reverse swing, leaving the OPA grossly underestimating demand. Fortunately, the OPA intends reviewing the forecast on a three-year cycle. It should be prepared to make additional commitments quickly if its estimate of a 0.9% per annum increase in demand proves to be too low. Otherwise, because of the long lead times for nuclear, it will be forced to burn expensive NG for base load.
[On June 10th of 2006 the media quoted the Independent Electricity System Operator to the effect that the demand had been underestimated by 2,500 to 3,000 MW, or about 10 per cent. - JALR]
In reducing demand much is expected of Conservation, 1,800 to 4,300MW by 2025, but there is little reason for confidence in achieving this target. Conservation has been urged and subsidized by governments since the oil crises of the 1970s with very little effect on people's behaviour. The Federal Government, in support of its Kyoto commitments, has conducted a multi-billion dollar campaign based largely on conservation; yet GHG emissions, far from decreasing have increased by 24%. How is Ontario going to do better? Fig.1.2.9 shows Conservation and Demand Management to have about the same cost as nuclear but most of the cost-effective conservation measures have already been taken. What new conservation is expected, or is the OPA assuming that increased prices will force people to reduce their consumption?
The claim that only conservation has "little or no long-term impact on the environment" (p.7) is nonsense. A simple example is the much touted replacement of an old refrigerator by a new energy-efficient one. For half the year in Canada the "waste" heat heats the home, so that the saving in clean electricity from hydro and nuclear will be compensated by increased burning of NG that pollutes. The old refrigerator will either be used elsewhere, when there is negative saving of electricity, or sent to a landfill for disposal. At this stage its refrigerant may be released to damage the ozone layer. Before all this, manufacture of the new refrigerator will have consumed materials and energy, and caused pollution, years before replacement was necessary.
The policy seems to be a response to a public perception that renewables are by their nature environmentally benign and, because the energy is free, that they are cost-effective. The SENES scoring process does not capture all the environmental impacts that have led to opposition to wind generators and hydro projects. The Report fails to mention that worldwide wind generators have been installed only when legislated or heavily subsidized. The environmental impact of additional transmission lines for generators remote from load centres does not appear to have been assessed. In Canada only transmission lines and hydroelectric developments have caused as much public opposition as nuclear and of these only transmission and hydro projects have been halted by that opposition. If "green" is motherhood, facts are an effective contraceptive.
There may also be a misperception about the public's attitude to nuclear. Whatever may have been past attitudes recent opinion polls show that nearly two in three Ontarians support the use of nuclear energy to provide electricity. That this is not widely recognized is due to a well orchestrated protest industry whose subscriptions and hence existence depend on continued public outrage, encouraged by media that profit from confrontation and criticism.
Three frequent criticisms of nuclear that deserve examination are "There is no solution to the waste problem", "Nuclear projects suffer from schedule delays and cost overruns" and "CANDUs can't load follow". The Report (p.37) includes under Challenges for Nuclear "public acceptance" (already discussed), "complex waste disposal", "construction cost risk" and "limited load-following capability".
The Nuclear Waste Management Organization (NWMO), charged by the Federal Government to recommend an appropriate long-term management approach for used nuclear fuel, has confirmed that each of the three options that it was required to examine, deep geological disposal, storage at reactor sites and centralized storage, is "credible and could be designed to be safe for the near term" at least. Its essential recommendation, eventual containment and isolation of nuclear fuel wastes in a deep geological repository, is what the nuclear industry has been recommending for three decades and what has been endorsed by five independent reviews in Canada alone.
The NWMO, as a result of its assessment of Canadians' values, recommended a fourth option that included many of the advantages of the other three while minimizing their limitations. This consisted of initial on-site storage and eventual deep geological disposal with the option of interim centralized storage. To achieve public acceptance the NWMO proposes an Adaptive Phased Management (APM) approach that would "build on sequential decision-making which would preserve flexibility during implementation ..." to allow for any new developments. This should reassure members of the public that they are not writing a blank cheque but that they will have the opportunity for further input along the way.
The NWMO devoted much effort to engaging the public, emphasizing "Dialogue". Although it is difficult to imagine what more could have been done, the response was disappointing: the report refers to "thousands" involved, out of 32 million Canadians. This apparently negative result is reassuring in that the vast majority of Canadians are not sufficiently concerned by nuclear wastes to take the trouble to participate. This confirms the results of the opinion poll showing that there is no serious opposition to nuclear.
The criticism that nuclear projects suffer from schedule delays and cost overruns stems largely from construction of the Darlington Nuclear Generating Station (NGS), and later from refurbishment of one of the laid-up reactors at the Pickering-A NGS. Conventional wisdom is that Ontario Hydro (OH), the predecessor of Ontario Power Generation (OPG), was responsible. However, a critical review of the facts demonstrated that political interference by all three parties when in power was largely responsible for the delays and hence the cost overruns. Justification for this is available at www.magma.ca/~jalrob/CANcosts.htm. Recently, OPG has improved its performance in refurbishing another reactor of the Pickering-A NGS, while Bruce Power, free from political interference, has performed well both in operating the Bruce-B NGS and in refurbishing reactors of the Bruce-A NGS.
Whoever was responsible for past overruns OH/OPG's history has little relevance to future estimates since OPG is no longer in reactor construction. What is relevant is that consortia of Canadian companies have designed, built and delivered six CANDU reactors overseas in the last nine years - all on or ahead of schedule, and on budget. The first of two CANDU units in China, at Qinshan, took only four and a half years from first concrete to in-service, making it a record for power reactors built in China. Both reactors were built ahead of schedule and under budget. This project has been praised by the Chinese government as the best nuclear project in China.
Some of the NG, which is more expensive and more polluting than nuclear, is recommended by the OPA because of nuclear's "limited load-following capability" (p.37). While CANDUs were not designed for daily load following some have experimented with limited load following and French PWR reactors have successfully operated with daily load following. Now that the incentive is clear the Canadian nuclear industry should work to define limits for load following. The OPA should monitor progress and adjust its estimates for the NG/nuclear split accordingly every three years when reviewing its demand forecast.
In Ontario adequate electricity is essential. Shortages can be fatal for people and for industries. Electricity is needed not just to "Live better electrically" - although we do - but for hospitals and schools, for commerce, communications and industry and even for some transportation. But the electricity must be not only adequate but affordable. Higher prices cause real hardship for the poor, but this could be mitigated by social payments. What cannot be mitigated is loss of industries due to high prices rendering them uncompetitive. Jobs, mostly the better paid ones, would be lost along with the tax base that pays for our social programs.
Diversity of supply to protect against the unexpected is a good principle but it should be applied with reason. Renewables by their intermittent nature and their dependence on nature are inherently unreliable. NG is at risk of being interrupted by accidents or sabotage to major pipelines and by U.S. shortages beyond Canadian control since under NAFTA Canada would have to share the pain. Large scale hydro and nuclear are more reliable. In Canada Quebec and British Columbia depend heavily on hydro while France has relied on nuclear for 75% of its electricity for many years.
In proposing an electricity portfolio more expensive than necessary the OPA is only carrying out policy directives from the Provincial Government. However, professional integrity and ethics requires that the OPA should make abundantly clear to the government and the public what premium they and Ontario industry would have to pay for questionable benefits to generations hundreds of years in the future.
This submission has presented a prima facie case for much more nuclear than proposed in the Report. The OPA should assess the costs and benefits of this case with its own recommendation thus providing the Ontario Government and the public with the means for making informed decisions. The policy requiring the OPA to maximize renewables regardless of costs was introduced before the information in this report was available. Now that choices, costs and consequences are known it is appropriate to reassess the policy.
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